city of nagoya
Financial Condition of City of Nagoya
Major redevelopment of the area surrounding Nagoya Station is making progress
Port of Nagoya Nagoya Castle Hommaru Palace Boasting the nation’s busiest port Grand Entrance & Main Hall in both shipping tonnage and cargo value Open to public (photo by Nagoya port authority)
October 2016 Finance Bureau, City of Nagoya
Contact Funds Division, Finance Department, Finance Bureau, City of Nagoya TEL：052-972-2309 Fax：052-972-4107 National important cultural property – Nagoya city hall E-mail：[email protected] MRJ (photo by Mitsubishi Aircraft Corporation) city of nagoya Table of Contents
Ⅰ. FY2016 Bond Issuance Plan Ⅲ. Nagoya’s Fiscal Conditions FY2016 Nagoya City’s Bond Issuance Plan・・・・・・1 Overview of General Account for FY2016・・・・・・21 FY2016 Plan for Municipal Bond Public Offerings・・・・・・2 General Account・・・・・・22 Highlights of FY2016 Bond Issuance Plan ・・・・・・3 Municipal Tax Revenue・・・・・・23 History of Efforts on Nagoya City Bonds･・・・・・・4 Overview of 5% Residential Tax Cut(From FY2012 Onward)・・・・・・24 Issuance Amount of Municipal Bonds in FY2014/2015・・・・・・5 Overview of 10% Residential Tax Cut(From FY2010 Onward) ・・・・・25 Actual Issuance of Publicly Offered Bonds・・・・・・6 Future Fiscal Management・・・・・・26 Postwar History of Nagoya City Bonds・・・・・・7 Outstanding Municipal Bonds・・・・・・27 Rating・・・・・・8 Primary Balance of General Account・・・・・・28 Municipal Bond Issuance of General Account and Dependence on Ⅱ. The City of Nagoya Public Bonds ・・・・・・29 Profile of Nagoya・・・・・・9 Public Bonds Redemption Fund (Bullet Bonds) ・・・・・・30 Population Dynamics of Nagoya City・・・・・・10 Ratio for Determining Financial Soundness/Financial Shortfall Ratio ・31 Nagoya’s Transportation Network・・・・・・11 Comparison of Fiscal Condition with Other Cities・・・・・・32 Redevelopment of Area Adjacent to Nagoya Station・・・・・・12 Nagoya City’s Position Among Municipal Bond Issuers・・・・・・33 Aiming to Develop a Super Terminal Nagoya! ・・・・・・13 Ⅳ. Appendix・・・・・・34 Special Zone Comprising Asia’s No.1 Aerospace Industry Cluster・・・14 Port of Nagoya with Japan’s Largest Cargo Volume; and Initiatives to Develop a Center for Manufacturing and Cultural Exchanges ～Opening of Theme Park LEGOLAND®Japan ・・・・・・15 ・・・・・・The Restoration of Nagoya Castle Hommaru Palace・・・・・・16 Reminder 55 Nagoya City Hall Main Building Designated as a Nationally Important Cultural Heritage・・・・・・17 Characteristics of Nagoya Economic Zone ・・・・・・18 Economic Snapshot of Nagoya City・・・・・・19 Economic Size of Nagoya・・・・・・20 city of nagoya Ⅰ. FY2016 Bond Issuance Plan FY2016 Nagoya City’s Bond Issuance Plan
（Million Yen） FY2016 FY2015 YOY Change Category A B A-B Government Funds 39,366 40,588 △1,222
Private Flows 176,447 178,688 △2,241
Public Bond Offerings 137,000 138,000 △1,000
（Flex quota）（45,000）（45,000） -
Bonds underwritten by banks 39,447 40,688 △1,241
Total 215,813 219,276 △3,463
* This plan may change, as it is an estimate at the beginning of FY2016
1 city of nagoya Ⅰ. FY2016 Bond Issuance Plan FY2016 Plan for Municipal Bond Public Offerings
（Million yen）
Monthly Plan Issue Maturities Amount Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar.
Medium-term 10,000 10,000 bonds
10-year bonds 60,000 10,000 20,000 10,000 20,000
Ultra-long-term 20yr 30y 20,000 10,000 10,000 bonds City resident 2,000 2,000 bonds Upsize for 20yr 5yr 7,000 Upsize for 5yr 45,000 5,000 20,000 8,000 Flexible quota 5,000 Upsize for 10yr
Total 137,000 15,000 32,000 20,000 32,000 10,000 20,000
* Results to Sep., plans from Oct. as of the end of Sep. * Monthly total amount does not include flexible quota from Oct.
2 city of nagoya Ⅰ. FY2016 Bond Issuance Plan Highlights of FY2016 Bond Issuance Plan
1. Expected amount of city bonds The amount of city bonds to be issued in this fiscal year is expected to decrease by approx. 3.5 billion yen from the previous fiscal year, of which 1.2 billion yen from public funds and 2.3 billion yen from private funds.
2. Bond management focusing on market situations
The city continues making efforts on bond management focusing on market situations (1) Implementation of negotiated style deals The city continues to emphasize the importance of communication with the market utilizing negotiated style deals for mid-term, long-term(planned in June and December) and super-long-term bonds.
(2) Maintenance of flexible quota : 45 billion yen The flexible quota for this fiscal year is 45 billion yen to continue to enable flexible and agile bond issuance in response to market environment. (Last fiscal year’s limit was 45 billion yen)
(3) Proactive investor relation management The city proactively visits investors at the time of bond issuance etc.
3. Constant new initiatives The city will continue to consider various new initiatives in response to market needs, as shown by 10-year fixed redemption bond and a shorter period from pricing to closing in the last fiscal year.
3 city of nagoya Ⅰ. FY2016 Bond Issuance Plan History of Efforts on Nagoya City Bonds
FY2013 ¾ Expansion of flex quota In order to further promote the mobility and flexibility of issuance of bonds according to market environment, the flex quota was increased by 20 billion yen from the previous year to 40 billion yen. ¾ Simultaneous issuance of 7-year, 10-year and 12 year bonds After the implementation of quantitative monetary easing, in response to drastic fluctuations of JGB’s yields, duration periods were diversified and the first 3- year municipal bond was issued to respond to investors’ duration needs. ¾ Issuance of 6-year bond based on duration hearing 6-year bond was issued with its duration period determined based on hearing of investors’ preferred duration periods instead of fixing a duration period in advance. such method was used for the first time for municipal bonds. ¾ Terms determined on the day before a month end to respond to diversification needs) 20-year-bond) In contrast to determinations of municipal bond issue terms concentrated between early and mid-months, a 20-year- bond was issued based by 20nil.
FY2014 ¾ Expansion of flex quota In order to further promote mobility and flexibility in issuance of bonds according to market environment, the flex quota will be increased by 20 billion yen to 60 billion yen ¾ Issuance of 10-year fixed redemption bond for In response to investors’ needs, the first 10-year fixed redemption bond was issued through market-public offering. The bond’s pricing is benchmarked for JGB, for the first time for market-publicly offered fixed redemption bonds.
FY2015
¾ Maintenance of flexible quota The flexible limit for this fiscal year is 45 billion yen to continue to enable flexible and agile bond issuance in response to market environment. ¾ Continuous issuance of 10-year fixed redemption bond The issuance of 10-year fixed redemption bond is continued, with pricing based on mid-swap (MS) as the benchmark in response to investors’ needs ¾ The minimum period between pricing date and closing date shortened from 6 to 5 business days (negotiated style deals) Aiming to reduce interest rate risks between pricing date and closing date for investors (excluding deals with the same redemption date as JGB). ¾ 10-year bond issuance from flex quota The first attempt to issue 10-year bond from flex quota besides quarter end months in order to meet investor demands in 10-year space. ¾ Exceeded issuance amount than plan for large investor demands Issuing more than planned by increasing flex quota to meet investor demands for 10-year bond in December.
4 city of nagoya Ⅰ. FY2016 Bond Issuance Plan Issuance Amount of Municipal Bonds in FY2014/2015
Issuance Amount for FY2015 （Million yen） Monthly Plan Category Amount Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Medium-term bonds 10,000 5yr 10,000
10-year bonds 60,000 10,000 20,000 10,000 20,000
Super-long bonds 20,00020yr 10,00020yr 10,000 Upsize for 5yr City resident bonds 3,000Upsize 10yr fixed 3,000 Upsize for 20yr for 10yr redemption bond Upsize 5,000 for 10yr Flexible quota 51,000 Upsize 5,000 8,000 12,00010yr 10,000 （6,000） for 20yr 5,000 Total 144,000 15,000 18,000 12,000 20,000 13,000 30,000 16,000 20,000
Issuance Amount for FY2014 （Million yen） Monthly Plan Category Amount Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Medium-term bonds 20,0005yr 10,0005yr 10,000
10-year bonds 60,000 10,000 20,000 10,000 20,000
Super-long bonds 20,00020yr 10,00030yr 10,000
City resident bonds 3,000 3,000 Upsize Upsize 10yr fixed for 5yr for 10yr redemption bond 5,000 15yr 10,000 Upsize for 5yr Flexible quota 60,000 Upsize 5,000 10,000 10,000 15,000 5,000 Upsize for 10yr for 20yr Total 163,000 30,000 20,000 10,000 20,000 13,000 15,000 35,000 20,000
* 20yr bonds in May were priced in May and issued in Jun 5 city of nagoya Ⅰ. FY2016 Bond Issuance Plan Actual Issuance of Publicly Offered Bonds
Amount of Publicly Offered Bonds since FY2007 The bonds that city offers （Billion Yen） 180 163 164 are all negotiated style 150 160 140 10 and mainly in 10yrs, 135 20 132 10 137 140 10 122 together with shorter or 116 15 19 15 30 25 12 12 120 15 15 longer tenor to fund in a 12 10 13 26 20 10 12 balanced manner. 100 33 35 14 12 20 20 10 10 10 35 15 80 10 10 10 Since FY2009, the city 15 60 has introduced the flex 40 80 80 80 80 84 quota to enable flexible 72 75 63 75 20 responses to changing 0 financial situations. 2007 2008 2009 2010 2011 2012 2013 2014 2015 （FY） 10yr 3yr 5yr 6yr 7yr 12yr 15yr 20yr 30yr 10yr fixed redemption
Outstanding Amount by Maturity as of the End of FY2015 （Billion Yen） 700 550 600 20 414 500 95 10 20 400 40 12 300 239 430 20 200 369 104 100 192 104 0 27 5yrs or less More than 5yrs and More than 5yrs and More than 20yrs 10yrs or less 10yrs or less 10yr 5yr 6yr 7yr 12yr 15yr 20yr 30yr 10yr fixed redemption 6 city of nagoya Ⅰ. FY2016 Bond Issuance Plan Postwar History of Nagoya City Bonds
1966 Started to issue national 2003 government Started to issue city resident bonds bonds 1909 2005 2012 Issued foreign Started to issue Started to issue 3, 6 bonds denominated 1952 30yr bonds in pound sterling and 15yr bonds Started to issue 2000 2014 public offered bonds(10yr bonds) Startedtoissue Started to issue 10yr fixed redemption bonds 5yr bonds 2004 Started to issue 20yr bonds April, 2006 Adopted negotiated style for all 2010 Recent Issues of Nagoya City Bonds issuance Outstanding volume Issue Amount Maturity Year/Month Series coupon reached 1 trillion yen (million yen) (years) 2013 May 17th20yr 150 20 1.203％ Started to issue 7 Jun 491th10yr 180 10 0.587％ and 12yr bonds 2nd10yr fixed Jul 120 10 0.275％ redemption Sep 492th10yr 200 10 0.485％ FY2015 493th10yr 100 10 0.491％ Oct 13th city resident 30 5 0.12 ％ Nagoya started to issue publicly offered bonds in 1952. Nagoya 22nd5yr 150 5 0.101％ city bonds have a longer postwar history than national government Nov 18th20yr 150 20 1.139％ bonds th ％ Dec 494 10yr 160 10 0.464 Before the war in 1909, Nagoya issued foreign bonds denominated Mar 495th10yr 200 10 0.110％ Apr 19th20yr 150 20 0.323％ in pound sterling 23nd5yr 170 5 0.005% Jun Nagoya has diversified maturities since 2000 496th10yr 150 10 0.070% FY2016 Sep 497th10yr 200 10 0.110% 24th5yr 200 5 0.001% Oct 12th30yr 100 30 0.610% 7 city of nagoya Ⅰ. FY2016 Bond Issuance Plan Rating
Nagoya has obtained a rating from Moody’s Investors Service Inc.(currently Moody’s Japan ムーディーズ格付け K.K.) since Nov 7, 2007. Rating by Moody’s Along with the downgrading of Japan government’s rating from Aa3 to A1 on December , 2014, the Nagoya City’s and A1 other municipalities’ rating were also changed to A1. （Stable）＝Same as Japanese Government Bond
Basis of rating The Nagoya City’s strong tax revenue base supported by affluent regional company Nagoya City’s strong liquidity The central government’s robust involvement in local fiscal management and solid intuition framework including the fiscal coordination system
8 city of nagoya Ⅱ. The City of Nagoya Profile of Nagoya
Nagoya Overview
Area 326.45k㎡（April 1, 2016）
Average 16.6℃ （Average in 2015） temperature
Precipitation 1,803.0mm （Total in 2015）
（Oct 1, 2015） Population 2,296,014 *preliminary census （Oct 1, 2015） Households 1,057,936 *preliminary census Daytime 2,569,376 （Oct 1, 2010） population Hokuriku Tokai-Hokuriku Planned Linear Expressway リニア中央新幹線（予定） Business Expressway Chuo Shinkansen 125,884 （July 1, 2014） Gifu Chuo- establishments Expressway Tokai-Kanjo Employed Expressway 1,498,995 （July 1, 2014） individuals
Shizuoka 平成27年度開業予定 Do you know the mark ? Nagoya AICHI The above-shown symbol, with the Japanese numeral 8 in a 新東名高速道路 circle, was designated as City of Nagoya’s city emblem in 1907. This symbol is believed to have originally been a distinguishing mark used by Owari Branch of Tokugawa Family—“numeral eight in a circle” mark. A distinguishing mark generally refers to a mark that distinguishes a family or a group from others. The numeral eight in a circle mark was Owari To the world Brach’s unofficial crest used on its リニア中央新幹線 servants’ lanterns, as rank-andfile members’ family crests, by logistics corps, etc. (The Branch’s official family crest was designed with leaves of asarum caulescens, a kind of wild ginger.) 9 city of nagoya Ⅱ. The City of Nagoya Population Dynamics of Nagoya City
Population Shift for Nagoya City Projected Population Nagoya has a population of 2,296,014 as of October 2015, （Million people） 2015=100 which is the third largest 2.4 105 among the ordinance- designated cities. This number 2016 100.00 was recorded as historical high, after 18 consecutive 2.3 100 years’ growth since 1997. Nagoya (case no.1) has the similar scale of population even in the future (considering 95 that population outflow will be 2.2 peaked out in 2020 with Japan central government’s effort to 90 balance out population overconcentration in Tokyo to other prefectures). 2.1 Nagoya (case no.2) shows that 85 the population would be peaked out in 2016 then decrease gradually, which is 2.0 80 more moderate than Japan as 2003 2005 2007 2009 2011 2013 2015 2015 2020 2025 2030 2035 2040 2045 （年） a whole. Nagoya(case no.1) Nagoya(case no.2) Whole Japan *as of October 1 each year Preliminary census for 2015 *Nagoya’s numbers are estimates by Nagoya City National numbers are based on National Institute of Population and Social Security Research, “Population Projection for Japan by Municipality (estimates in January 2012)” 10 city of nagoya Ⅱ. The City of Nagoya Nagoya’s Transportation Network
Transportation network Located in the center of the Pacific side of the Japanese archipelago, the port of Nagoya has surrounding Nagoya City is been developed as an integrated port highly developed as a gateway equipped with logistics, production, disaster prevention, exchanges and transportation to Nagoya Metropolitan Area ; functions. The total weight of the cargos was approx. 197.98 mil. tons in 2015, the the port of Nagoya as the largest in Japan for 14 consecutive years Port of Nagoya since 2003. The port supports the industry and ⓒCentral Japan Railway Company. All rights reserved. maritime gateway to the Chubu citizens in the Chubu region where global manufacturing industries, including The operation of the Linear Chuo Shinkansen region and the Chubu automotive, machine tool and aerospace Line (between Tokyo and Nagoya), which is to International Airport at industries, are concentrated. be started in 2027, will enable travelling between the two cities in approx.40 minutes. approx.30 minutes train ride from Nagoya Station When Linear Chuo Shinkansen Line starts operating, the travel Moriyama Smart IC time between Tokyo and (Scheduled to become available in 2017) Nagoya will only be 40 minutes Nagoya Tokyo from the current 100 minutes. Furthermore, New Tomei Expressway and its Moriyama smart interchange (IC) are scheduled to be opened, which New Tomei Expressway （Opened in 2015） will contribute to further enhancement of Nagoya’s Tomei Expressway transportation network Chubu International Airport (Centrair)
International flights: 353 flights/week ; 40 cities Domestic flights: 81 flights/day; 18 cities As of June 1, 2016 11 city of nagoya Ⅱ. The City of Nagoya Redevelopment of Area Adjacent to Nagoya Station
N Overview 1 2 3 4 5 Major redevelopment of the area surrounding Nagoya station that will be a terminal for Linear Chuo Shinkansen upon its opening is making progress and being accelerated—including Midtown 1 Square and Nagoya Lucent Tower. Aichi Industry & Labor Meieki 4-4 South district Ushijima Minami district Meieki 4-7 district Nayabashi West district 8 Center （Nagoya Cross Court 7 （Nagoya Lucent Tower） （Midland Square） （Aquatown Nayabashi） （Wing Aichi） Tower） Furthermore, the area surrounding 3 4 11 Nagoya station and Sakae area 2 6 7 8 9 have been designated as an urgent 10 5 urban renewal area as an especially 6 effective area for reinforcing the city’s international competitiveness. Nagoya Mitsui Building 14 New Annex
12 Meieki 4-27 district Meieki 1-1 project Sasashima live 24 名駅一丁目1番計画Meieki 3 project （Mode Gakuen Spiral North district （Chukyo TV New （南地区（ＪＲゲートタワー）Grand Nagoya Building） 13 Towers） （JP Tower Nagoya） Company Premise） 9 10 11 12 13 14
Keys
Completed To be completed in FY2016 To be completed in FY2017 Sasashima live 24 0 500m Meieki 4-10 district （Aichi University’s Nagoya campus） （Symphony Toyota Meieki 1-1 project South Sasashima live 24 Phase 1: Apr. 2012 - Nayabashi East district building） district (JR Gate Tower) （Global Gate） Phase 2 : Apr. 2017 – to be opened
12 city of nagoya Ⅱ. The City of Nagoya Aiming to Develop a Super Terminal Nagoya!
The operation of Linear Chuo Major projects and Schedule Shinkansen between Tokyo and FY2014 FY2020 FY2027 Nagoya is scheduled to be started (Previous period) (Latter period) (The parties) in 2027 and its Nagoya City Urban development leveraging each district’s characteristics • Nagoya city terminal station will be located Enhancement of urban ①Enhancement of Examination of The private reproduction development • Central government, functions urban functions the incentive in the city reproduction special district Aichi pref. underground beneath Nagoya • Developer Station, which will further enhance Examination Building transfer of the Necessary Nagoya Station’s locational ②Horizontal land improvement improvement procedures • Nagoya city building improvement advantages and convenience. improvement in contests • Central government, the area Aichi pref. Horizontal improvement in the area surrounding the • Railway operators The municipality government of surrounding the Linear station Acquisition etc. of Linear station Improvement • Developer Nagoya has compiled “Urban station area
Development Initiatives for the • Nagoya city ③Development of a Examination Planning of • Central government, Area Surrounding Nagoya Station,” space for easy- of the improvement, Design and Aichi pref. tounderstand improvement Necessary improvement • Railway operators which indicate goals of and contests procedures • Underground street Development of a space Transition company approaches towards collaborative for easy-to-understand transition • Nagoya city ④Redevelopment Examination Planning of • Railway operators urban development to be shared of the square in of the improvement, Design and • Underground street with various entities including front of the improvement Necessary improvement company station contests procedures • Transportation railway operators. facilities manager (new east and west passageway) Planning and examination ⑤Enhancement of of the Necessary Design and The city’s targeted vision improvement procedures improvement the network contests between eastern • Nagoya city (effective practical use of existing passageway) • Railway operators Globally-recognized super and western areas Examination Planning of terminal Nagoya: of the improvement, Design and improvement Necessary improvement A city filled with attractiveness contests procedures
and vitality and equipped with (Redevelopment of the railway station and bus terminal) Redevelopment of the ⑥Redevelopment Planning and • Nagoya city world-class terminal stations square in front of the station plan for examination Necessary • Railway operators Meitetsu’s Meieki of the Design and improvement procedures improvement • Developer station contests Urban development Examination Planning of of the improvement, Design and basic policies ⑦Improvement of improvement Necessary improvement • Nagoya city access to and contests procedures • Central government, Expansion and improvement of pedestrians’ Aichi pref. space along with Meieki street and from Improvement of Aiming to develop a front base Enhancement of the network between Planning and improvement of •Expressway improvement of access to the station Tubakimachi-line eastern and western areas expressways the Sasashima-line public corporation forthe zone playing international and Sasashima- (south district of Nagoya station) Shinkansen Chuo of Linear operation After the starting and geographically broad roles; line ⑧Urban Organizing of city development Developing world-class terminal development • Nagoya city creating vision for the future and Redevelopment plan for Carry out every district • Urban development leveraging each consensus building, stations that are universally Meitetsu’s Meieki station organization district’s practice of area management etc. easy to use; characteristics • Nagoya city ⑨Expansion and • Railway operators Developing linking metropolitan improvement of Examination Planning of • Underground street Development of spacy pedestrians’ space of the improvement, Design and company areas with a variety of underground pathways along with Meieki -Keys - improvement Necessary improvement • Transportation street and contests procedures facilities manager attractiveness; and Completed improvement of Under development • Urban development Government and private-sector access to the station organization ⑩Development of working together to implement Improvement of access to and from Examination Planning of • Nagoya city expressways spacy of the improvement, Design and • Underground street initiatives steadily towards the underground improvement Necessary improvement company contests procedures • Developer commencement of the operation pathways of the Linear Shinkansen 13 city of nagoya Ⅱ. The City of Nagoya
Special Zone Comprising Asia’s No.1 Aerospace Industry Cluster
In December 2011, Aichi Prefecture including the city of Nagoya and Gifu Prefecture were designated as an international strategic zone, specifically Special Zone to Create Asia’s Number One Aerospace Industry Cluster. The Special Zone was expanded in October 2013 to include Mie prefecture and in June 2014 Nagano and Shizuoka prefectures, with the aim to mobilize all resources of the Chubu region and thereby to Loading Boeing 787 components to a specialized transport aircraft make the next leap forward to develop one of the (Boeing 747 “Dream Lifter”) three global bases for the aerospace industries in the region along with U.S.’ Seattle and France’s Provided by MRJ and Mitsubishi Aircraft Corporation Toulouse. Summary Purpose: Finished aircraft To create Asia’s largest and most effective maker Oversea From a Tier 1 maker to a finished aircraft maker aerospace industry cluster airframe maker Improving the quality of suppliers; aiming for Nominal goals（2013→2020） Tier 1
18,600 → 25,000
National Institute of z New and added aerospace-related factories Large Public Advanced wind tunnels National JAXA Flight examination and Industry support Local Industrial Universities built in Aichi, Gifu and Mie areas : Composite Center Research Center research agencies governments Science and institutions 40 in 5years from FY2016 to FY2020 Technology (AIST) （ ） The Aerospace Industry Cluster’s future vision for commercial aircrafts 14 city of nagoya Ⅱ. The City of Nagoya
Port of Nagoya With Japan’s Largest Cargo Volume; and Initiatives to Develop a Center for Manufacturing and Cultural Exchanges-opening of Theme Park LEGOLAND®Japan
Port of Nagoya Opened in 1907, Port of Nagoya has been a maritime gateway to support the manufacturing industry and people’s livelihood in the Chubu Region. Today the Port has developed into an international port equipped with comprehensive functions, connected with 160 countries and territories and dealing with Japan’s largest cargo volume etc. Port of Nagoya is Japan’s largest port in the following categories: (2014 actual values) Category Data 2nd largest 3rd largest Cargo volume 197.98 mn. tons Chiba Yokohama Export value 11,471.7 bn. yen Yokohama Tokyo Trade surplus value 6,072.9bn. yen Yokohama Kobe Units of automobiles 1,358,357 units Mikawa Yokohama exported （Photo by Nagoya Port Authority） LEGOLAND® Japan Center for manufacturing and cultural exchanges Ise Wangan (coastal) Expressway: LEGOLAND® operates theme parks worldwide—6 The city of Nagoya has formulated a plan to develop a center for Meiko-Chuo Interchange parks in 5 countries today-with LEGO bricks as their manufacturing and cultural exchanges at Port of Nagoya’s Kinjo Pier focus. They offer children—mainly from infants to Nagoya City Kinjo Pier where people will conduct various exchanges with focuses on parking structure (tentative name) LEGOLAND®JAPAN The photo is for illustrative purposes only) elementary school pupils—and their family members “manufacturing” and “industrial technologies.” (The photo is for illustrative purposes only) interactive and intellectual education- and experience- So far, it has developed such facilities as Manufacturing and oriented coasters and attractions and shows. Cultural Exchange Plaza and also held a tree planting festival and LEGOLAND®JAPAN is scheduled to be opened in various trialsessions. Currently it is discussing various initiatives FY2017, which is expected to make Nagoya a tourist based on proposals from the private-sector, with a focus on the destination for both Japanese and foreign travelers. development of a theme park.
Aonami Line Kinjo Futo (Pier) SCMAGLEV and Railway Park: Station Nagoya International Exhibition Hall SCMAGLEV and JR-Central’s railway museum opened in March 2011 – introducing (Portmesse Nagoya) Railway Park Station advances in high speed railway technologies including JR-Central’s square buleet trains, the Shinkansen
Legends
Theme park etc.
Commercial facilities etc.
Convention halls etc.
Squares etc.
Parking lots etc.
Parking structure
（Photo by Marlin Entertainments） （Photo by Central Japan Railway Company (JR-Central)） 15 city of nagoya Ⅱ. The City of Nagoya The Restoration of Nagoya Castle Hommaru Palace
Nagoya Castle’s main building used to have a Honmaru (main) Palace in addition to its castle tower. This Honmaru Palace was said to be one of the two best structures built with the traditional Samurai style of Japanese architecture along with Ninomaru Palace of Kyoto’s Nijo Castle that is a masterpiece of modern Japan’s castle architecture and today is designated as a National Treasure. Honmaru Palace was designated as the first National Treasure of castle architecture but was burned down in 1945 during the war. Nagoya Castle’s restored Hommaru Palace and its The city of Nagoya has been rebuilding entrance and carriage porch before they were burned Honmaru Palace as a historic and cultural down during the war symbol of Nagoya to hand down the importance of the skills and the heart of manufacturing and of natural environment to the succeeding generations. The Place is scheduled to be open to the public in three phases—and in its entirety by 2018. For the first phase, its entrance and front drawing North-eastern side of the front drawing room has been opened to the public since May room Ichinoma 29, 2013, which received a million visitors by May 10, 2014. For the second phase, its meeting room and other areas will be made open to the public from June 1, 2016. Nagoya Castle’s restored Hommaru Palace and its entrance and carriage porch Outline of the anastolysis Architecture： wooden, flat building of the shoin zukuri style with a shingle roof Total area：approx. 3,100㎡ Construction period：2008 to 2017 zPhase1: Entrance and front drawing room zPhase 2: Reception and main kitchen zPhase3: Jorakuden (a drawing room), Kuroki (blackwood) drawing room, etc. 16 city of nagoya Ⅱ. The City of Nagoya Nagoya City Hall Main Building Designated as a Nationally Important Cultural Heritage Nagoya City Hall main building that was completed in 1933 was, on December 10, 2014, designated as a Nationally Designated Important Heritage (structure) concurrently with the Aichi Exterior appearance Prefectural Government Office main building. Such designation of active government buildings had been unprecedented as well as of any government structures built in the early Showa Era. Nagoya City Hall main building designated as a Nationally Important Cultural Heritage Nagoya City Hall main building was constructed as a project commemorating the ascendance of Showa Emperor to the throne and has been used as a central facility of the city government for over 80 years since 1933. Uniquely designed with specialty tiles on its exterior walls and traditional interior furnishing, the building is highly recognized as an iconic early Showa-style government structure that incorporate Japanese tastes into Western architectural styles. In December 2014, it was designated as a Nationally Important Cultural Heritage concurrently with the neighboring Aichi Prefectural Government Office main building.
Highlights Ceremony Hall Guest room Central Hall Pillars and stair rails are made from high quality marble Kozakura from Yamaguchi Prefecture, excess marble used for the Diet Building. The Diet Building and the City Hall main building are believed to be the only government structures that use Kozakura marble. City Assembly Chamber Central Hallway The Central Hall is as high as approx. 20 meters with open ceiling. Over the ground floor are a beautiful combination of arch-shaped beams. A view from upper floors show stairs around the open ceiling space that look like an illusionist picture. North Hallway The hallway on the north side of the building is as long as approx. 100 Other characteristics meters. Such a long hallway is so rare and well-known that it is used for The main building is uniquely designed both in interior furnishing and exterior movie and TV drama filming. appearance that is intended to be in harmony with the view of Nagoya Castle *Tour of Nagoya City Hall main building Nagoya City Hall main building is open to the public on weekdays when the city government office is open—except the office spaces, Ceremony Hall, Guest Room and City Assembly Chamber. Please note that, given it is an active office building visited by many citizens and business people, any actions that could disturb office duties and/or other visitors are prohibited. Other points of attention posted on the City’s website at the URL below should be observed. Otherwise it would be our pleasure if you could enjoy visiting the main building when you are in our neighborhood (Maps of highlights of the building are distributed at the entrance). City of Nagoya’s official website, “About Nagoya City Hall main building”: http://www.city.nagoya.jp/somu/page/0000062076.html 17 city of nagoya Ⅱ. The City of Nagoya Characteristics of Nagoya Economic Zone
Nagoya ranked as one of the three major metropolitan areas in the nation
Nagoya area Tokyo area Osaka area Category Nationwide % % % nationwide nationwide nationwide Population （Thousand people） 127,110 11,332 8.9％ 36,126 28.4％ 18,351 14.4％ （CY2015）
Area GDP （billion yen） 546,730.1 54,623.5 10.0％ 174,579.1 31.9％ 74,214.2 13.6％ （FY2013）
Private establishments （Establishments） 5,541,634 502,541 9.1％ 1,397,347 25.2％ 804,632 14.5％ （CY2014）
Employees （Thousand people） 57,428 5,447 9.5％ 17,369 30.2％ 8,299 14.5％ （CY2014） Value of shipments of manufactured goods etc. （Billion yen） 305,140.0 59,475.2 19.5％ 52,145.5 17.1％ 38,129.6 12.5％ （CY2014） Wholesaler of yearly sales （Billion yen） 356,651.6 32,368.3 9.1％ 174,946.9 49.1％ 50,248.0 14.1％ （CY2014）
Retailing of yearly industry （Billion yen） 122,176.7 10,955.0 9.0％ 34,805.7 28.5％ 16,978.9 13.9％ （CY2014）
Annual income service industry （Billion yen） 211,397.6 14,912.0 7.1％ 94,501.1 44.7％ 24,435.5 11.6％ （CY2014）
The export value （Billion yen） 75,613.9 16,367.9 21.6％ 26,147.4 34.6％ 15,582.7 20.6％ （CY2015）
The import value （Billion yen） 78,405.5 9,058.2 11.6％ 36,203.6 46.2％ 14,803.2 18.9％ （CY2015）
The Nagoya metro area is notable for its high concentration of manufacturing. The region’s shipment of manufactured goods is the highest among the three major metro areas. 18 city of nagoya Ⅱ. The City of Nagoya Economic Snapshot of Nagoya City
Nominal gross production in Gross Product for Nagoya City (FY2013) Corporate Municipal Tax by Sector (FY2015) Nagoya is largely comprised of commercial sectors wholesale, retail and services. Other sector 1.4bil. yen Construction Manufacturing industries 2.6% including automotive sector sector 571.7bil. yen Other sectors Construction comprises 7.8%. 4.6% 1,073.5bil. yen sector Financial and 3.6bil. yen 8.7% Wholesale and insurance 6.5% Manufacturing industries Wholesale and retail sectors sectors retail sectors 10.4bil yen comprise 21.8% of the 636.3bil. yen 3,059.8bil. yen 18.5% corporate inhabitant taxes 5.2% 24.8% Financial and insurance (assessed in the relevant Manufacturing sectors year), indicating a higher sector Corporate 11.2bil. yen 966.2bil. yen percentage than that of the Gross Product 19.8% Municipal Service Sector 7.8% city’s gross production. 12,319.3bil. yen Tax 8.2bil. yen （100％） 56.3bil. yen 14.5% Real estate （100％） Manufacturing industries are sector Service sector largely comprised of chemical 1,398.1bil.yen 2,511.2bil. yen 11.4% 20.4% Manufacturing engineering, industrial Sector Transportation machinery and automotive 12.3bil. yen and Transportation component sectors. In FY2014, 21.8% communications and Real estate sectors the automobile-related sectors’ communication sector 5.8bil. yen performance continued to be sectors 3.4bil. yen 10.3% 2,102.5bil. yen 6.0% strong with ripple effects on 17.1% other sectors.
19 city of nagoya Ⅱ. The City of Nagoya Economic Size of Nagoya
Population Population of Major Cities （Oct 2015） （Million people） z As of Oct 2015, the population 400 of Nagoya was over 2,296 350 Same as Paris thousand, up 1.42% from 2010 300 (2,296,000) z The population has increased 250 for 19 years in a row from 200 2,151,000 in October 1996, a 150 total increase of approximately 100 145,000 50 0 z Daytime population is Kobe Sakai Kyoto Chiba Osaka Niigata 2,569,000 (National Census for Sendai Nagoya Saitama Sapporo Fukuoka Shizuoka Kawasaki Hiroshima Okayama Kumamoto Kitakyushu FY2012), the ratio of daytime to Yokohama Hamamatsu Sagamihara nighttime population is 113.5%, Gross Product （FY 2013） suggesting a significant （Trillion yen） population inflow from 20 surrounding area Same as Hungary and Vietnam 15 (12.319 trillion yen (12.52 billion dollars)) Gross product
z The gross product of Nagoya in 10 FY2013 was the third largest among ordinance-designated 5 cities after Osaka and 0 Yokohama. The gross product Kobe Kyoto Chiba Niigata of Nagoya accounts for Sendai Osaka Nagoya Saitama Sapporo Fukuoka Okayama Kawasaki Hiroshima
approximately 2.5% of Japan’s Kitakyushu Yokohama GDP. ※Cities not mentioned in the above graphs have not provided data for FY2013 20 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Overview of General Account for FY2016
Budget Revenue Budget Expenditure
Special grant to local government etc. By Usage By Type 2.3bil.yen 0.2％ Balance brought forward Municipal bond 87.9bil.yen Others Repayment of 27.4bil.yen 68.1bil.yen municipal 8.1% 6.3% 2.5% Human rights bonds Labor cost National and and citizen 132.6bil.yen 166.2bil.yen prefectural services 12.2% Property cost 15.3% treasury Internal revenue source 55.8bil.yen 94.0bil.yen disbursement 385.4bil.yen 5.1% 8.7% 236.4bil.yen 35.5% Citizen’s Citizens’ 21.7% economy welfare and Local tax grants Municipal tax Loans Revenue 91.5bil.yen health Expenditure 5.0bil.yen 506.5bil.yen Expenditure 80.2bil.yen 8.4% 480.7bil.yen 0.5% 1,085.6bil.yen 46.7% 7.4% 1,085.6bil.yen Social 1,085.6bil.yen 44.3% （ ％） （100％） assistance 100 （100％） expenditure Subsidies etc. Improvement 299.1bil.yen 103.0bil.yen Local gift tax and of urban areas 27.6% Internal revenue source 9.5% prefectural tax 700.2bil.yen 139.4bil.yen grant 64.5% 12.9% 73.6bil.yen Education and Miscellaneous 6.8% culture for Investment cost revenue Safety and citizen 96.0bil.yen 129.4bil.yen environment of Public bond cost 87.1bil.yen 8.8% 11.9% the city 131.8bil.yen 8.0% 98.5bil.yen 12.1% User fees and Monetary 9.1% transferred etc. charges 17.3bil.yen 47.0bil.yen 1.6% 4.3％
The general account budget increased 13.3 billion yen or 1.2% from the previous year to 1,085.6 billion yen. The City’s tax revenue in FY2016 increased 6.4 billion yen from the previous fiscal year despite of a decrease in corporate tax due to the fact that the part of the tax was allocated to national government. Revenue growth from individual tax and real property tax contributed to the net increase of the tax revenue. The ratio of the City’s independent revenue sources to its total revenue is 64.5%, which is the highest among Japan’s 12 ordinance-designated cities In terms of expenditure, mandatory expenses – personnel, social assistance and government debt expenses – stays the same as 55.0% as previous year of the total expenditure. 21 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions General Account
Budget revenue
(Billion yen) Under social assistance 1,200 1,085.6 expenditure, the budget scale of 1,034.5 1,049.9 1,028.8 1,025.9 1,057.4 1,072.3 979.2 979.0 983.7 990.8 family public assistance has been 1,000 flat while the support for welfare and child-rearing families related 800 374 388 434 469 465 459 472 502 511 401 377 projects have increased
600 Historical trend of social 85 81 103 123 94 85 71 68 (Billion yen) 101 92 79 assistance expenditure 400 350 517 529 500 487 488 500 500 507 299 200 477 477 472 300 259 0 61 250 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 215 42 (FY) 25 Municipal tax Municipal bond Others 25 200 40 35 Budget expenditure 160 37 21 39 150 38 29 (Billion yen) 39 15 52 1,200 100 24 41 1,072.3 1,085.6 15 1,034.5 1,049.9 1,028.8 1,025.9 1,057.4 21 979.2 979.0 983.7 990.8 26 1,000 19 50 396 393 86 87 412 392 391 383 394 66 800 388 380 384 392 52 0 86 96 600 89 91 73 76 89 2007 2010 2013 2016 104 99 98 91 134 132 140 140 139 139 137 Livelihood Welfare 140 148 147 147 400 Public childcare center Chindcare allowance 289 299 159 160 163 170 215 253 254 259 271 200 Medical support Others 188 193 193 190 179 176 172 169 166 168 166 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (FY) Labor cost Social assistance expenditure Public bond cost Investment expenditure Others 22 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Municipal Tax Revenue
（Billion yen） 600
（515.1） （517.3） （518.1） 521.8 （ ） 516.5 516.3 （492.2） （491.9） （495.5） 499.3 503.5 505.6 506.5 495.2 493.8 476.2 486.1 487.3 488.2 12 12 12 500 11 80 468.9 473.5 16 6 8 456.8 461.1 73 73 72 73 79 79 80 77 76 78 76 73 75 74 73 400
194 186 189 183 195 198 200 203 193 195 300 189 199 201 196 187 188
84 92 85 200 91 58 68 61 70 68 65 59 58 63 66 72 78
100 170 163 149 165 168 150 150 153 156 159 159 135 130 128 134 144
0 1997 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 （FY） Residential tax (individual) Residential tax (Corporate) Property tax Other taxes Decrease in revenue due to tax cuts
※The Figure used for tax grants is the settled amount up to FY2015, and the initial budget for FY2016. ※Totals inside parenthesis include decreases in tax revenue due to tax cuts. ※The indicated values are rounded off to the indicated numbers and may not match the annual totals. 23 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Overview of 5% Residential Tax Cut (From FY2012 Onward)
1. Purpose of the Tax Cut 5. Effects of the Tax Cut (Billion yen) To support the lives of the citizens and revitalize the local economy FY2012 Results as well as its future potential with respect to current economic Category conditions. Per capita basis Per income/corporate tax Tax cut 8.3 0.6 7.7 2. Tax Rate After the Tax Cut Residential tax (individual) 6.9 0.2 6.7 Residential tax (corporate) 1.4 0.4 1.0 ① Residential Tax (individual) （Per capita） Before tax cut 3,000yen→2,800yen （By income）Before tax cut 6％ →5.7％ FY2013 Results
Category ② Residential Tax (corporate) Per capita basis Per income/corporate tax （Per capita） Before tax cut 50,000yen – 3million yen Tax cut 11.1 0.8 10.3 Residential tax (individual) 7.9 0.2 7.7 → 47,500～2.85million yen Residential tax (corporate) 3.2 0.6 2.6 （By corporate tax） Before tax cut 14.7％→ 13.965％ 12.3％→ 11.685％ FY2014 Results
After Oct 1, 2014 Category Per capita basis Per income/corporate tax ％ ％ Tax cut 11.6 0.8 10.8 Before tax cut 12.1 →11.495 Residential tax (individual) 7.9 0.2 7.7 9.7％→ 9.215％ Residential tax (corporate) 3.7 0.6 3.1 3. Application FY2015 Results ① Residential Tax (individual) From FY2012 (Applied starting in June) Category Per capita basis Per income/corporate tax Tax cut 11.7 0.8 10.9 ② Residential Tax (corporate) Residential tax (individual) 8.2 0.2 8.0 From the fiscal year ending after April 1, 2012 Residential tax (corporate) 3.5 0.6 2.9
4. Others FY2016 Budget
Supplementary statement provided that an examination shall be Category Per capita basis Per income/corporate tax conducted within 3 years from the enforcement of the ordinance Tax cut 11.6 0.8 10.8 (April 1, 2012). Residential tax (individual) 8.2 0.2 8.0 Residential tax (corporate) 3.4 0.6 2.8 →The findings of the examination were reported to the City Assembly in November 2014. 24 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Overview of 10% Residential Tax Cut (From FY2010 Onward)
1. Purpose of the Tax Cut 4. Effects of the Tax Cut (Billion yen)
To support civil life and to revitalize the local economy in response FY2010 Results to current economic conditions. Category Per income/corporate Per capita basis tax Tax Cut 16.0 1.0 15.0 2. Tax Rate After the Tax Cut Residential tax 13.5 0.3 13.2 (individual) ① Residential Tax (individual) Residential tax 2.5 0.7 1.8 （Per capita）Before tax cut 3,000yen→2,700yen (corporate) （ ） ％ ％ By income Before tax cut 6 →5.4 FY2011 Results ② Residential Tax (Corporate) Category Per income/corporate Per capita basis （Per capita）Before tax cut 50,000 - 3million yen tax →45,000 – 2.7million yen Tax Cut 5.8 0.4 5.4 Residential tax （By corporate tax）Before tax cut 14.7％→13.23％ 1.9 0.04 1.9 (individual) 12.3％→11.07％ Residential tax 3.9 0.4 3.5 (corporate)
3. Application Total ① Residential Tax (individual) Category Per income/corporate Per capita basis For FY 2012 (Applied starting in June) tax Tax Cut 21.8 1.4 20.4 ② Residential Tax (corporate) Residential tax 15.4 0.3 15.1 For the fiscal year between April 1, 2010 and March 31, 2011 (individual) Residential tax 6.4 1.1 5.3 (corporate)
25 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Future Fiscal Management
Policy z While giving consideration to fair burdens among generations, systematic fiscal management will be conducted so that no excessive burden is handed down to the future generations.
Setting of rules z Municipal bonds’ roles include securing fairness of burdens among generations for construction of facilities etc. that provide benefits over time, leveling of fiscal expenditure, temporary fiscal supplement for shortage in tax revenue. On the other hand, given repayment for municipal bonds is a public bond cost and places a financial burden, certain rules were formulated regarding outstanding municipal bond amount. z Furthermore, a targeted amount to be accumulated for the financial adjustment fund was set, from the perspective of securing fiscal elasticity between fiscal years. （Formulated in Sep. 2010）
Details of the rules
Details of the rules FY2015 Results FY2016 Budget Current outstanding amount of general account municipal bonds shall not exceed the peak amount 1,695.7 bill. yen 1,656.3 bill. yen in the past (1,900.9bill. yen/end of FY2004). (Refer to page 27.) A surplus of each fiscal year’s primary balance shall be maintained A surplus of 84.9 bill. yen A surplus of 63.7 bill. yen (Refer to page 28).
Future burden ration shall not exceed 250% （FY2014 results ） （FY2015 results） (Refer to p. 31). （153.9％） （147.4％）
Real public bond cost ratio shall not exceed 18% （FY2014 results ） （FY2015 results） (Refer to p. 31). （13.0％） （12.7％）
Balance of the financial adjustment fund shall aim to 10.9 bill. yen 14.1 bill. yen achieve 10 bill. yen.
26 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Outstanding Municipal Bonds
General Account As a result of the reduction in （Billion yen） municipal bond issue amount 2,000 1,900.9 based on a decrease in 1,875.7 1,839.6 1,814.8 1,801.8 1,814.4 1,847.8 1,849.7 1,823.8 1,774.2 1,800 144 138 132 126 153 149 149 1,746.3 1,695.7 investment expenditure, 127 153 133 142 144 137 1,656.3 1,600 176 197 217 248 292 129 118 330 354 360 outstanding general account 1,400 369 373 379 municipal bonds decreased in 1,200 1,000 FY2005 for the first time after 800 1,630 1,584 1,531 1,491 1,452 1,425 1,403 1,371 FY1959. 600 1,321 1,270 1,240 1,193 1,159 400 From FY2009 to FY2011, the 200 outstanding bonds increased 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 （FY） for three consecutive years (general account) due to an Special municipal bond: Extraordinary fiscal measures bond Ordinary bond Bond to supplement a decrease in tax revenue,Extraordinary bond to supplement tax revenue, increase in issuance of special Bond to supplement a decrease in revenue (special bond), Bond to promote reforms of the third sector etc. municipal bonds including extraordinary financial Total Accounts measures bonds. （Billion yen） 3,463.6 3,412.1 3,369.2 3,323.1 3,282.1 3,263.9 3,283.6 3,244.3 3,174.8 3,079.2 3,003.6 The balance decreased 3,000 2,897.7 2,816.1 consecutively from FY2012 1,901 1,876 1,840 1,815 and is expected to decrease 1,802 1,814 1,848 1,850 1,824 1,774 1,746 further in FY2016 (general 2,000 1,696 1,656 account). 97 93 107 113 115 116 112 105 99 87 73 63 In the total account, too, the 1,000 53 1,466 1,444 1,423 1,396 1,365 outstanding amount has 1,334 1,324 1,289 1,252 1,218 1,185 1,139 1,107 continued to decrease since FY2011 and recorded below 3 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 （FY） trillion yen for the first time in Corporate account Special account General account 17 years, since 1998. *Settlement amounts until FY2015 and estimated amount in FY2016 *Expenditure for the city university has been settled in general account since FY2006 based on its transformation into an independent administrative institution. For a comparison purpose, the balance includes the expenditure for the city university in and before FY2005 in general account expenditure. *The indicated values are rounded off to the indicated numbers and may not match the annual totals. 27 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Primary Balance of General Account
The primary balance indicates （Billion yen） the relationship between 100 benefits and burdens among 85 generations and is calculated by 80 71 63 the formula (Revenue- Bond 61 66 60 revenue) - (Expenditure-Debt 49 49 50 64 63 Expenditure). 38 40 32 The primary balance is 21 adequate with balanced benefits 20 and burdens among generations 24 6 4 when expenditure (excluding 0 7 debt expenditure) is covered by revenue (excluding bond △5 △20 △18 revenue). Revenue Expenditure △40 A negative primary balance △38 Bond 68.1 Debt 131.8 means the current generation Revenue Expenditure receives more administrative △60 (63.7) Surplus of services than their burdens and Excluding the primary Bond 1,017.5 Excluding balance places a burden on future △80 Revenue Debt 953.8 generations. Nagoya has Expenditure maintained a positive primary △100 Total 1,085.6 Total 1,085.6 balance since FY 2003. △120 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 （FY）
※The figure used for tax grants is the settled amount up to FY 2015 and estimated amount in FY2016
28 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Municipal Bond Issuance of General Account and Dependence on Public Bonds
As a result of the reduction in （Billion yen） investment expenditure, 175 14.0% municipal bond issue amount and public bond dependency is 11.9% tendency to decrease together. 150 12.0% From FY2009 to 2010, municipal 10.6% bond issue amount and public 10.0% 124.0 bond dependency increased due 125 10.0% 14.0 9.1% to the issuance of special 8.6% 8.5% 109.3 8.2% municipal bonds - such as 11.8 100 97.3 7.7% 8.0% extraordinary financial measures 93.0 7.3% bond, bond for covering 83.8 15.0 83.6 82.2 46.1 81.7 6.3% decrease in local tax revenues 9.0 2.1 32.0 4.1 75.9 5.7% 75 40.4 68.1 6.0% and bond for promoting reform 22.0 20.6 28.0 60.3 0.1 of the third sector—against the 24.2 38.0 28.0 backdrop of economic 20.0 50 22.0 4.0% slowdown. However, they have since decreased and increased 65.5 63.9 again in FY2014 due to 58.1 61.7 25 50.6 52.6 47.9 53.7 48.0 2.0% construction investment 41.5 38.3 enlargement. The dependence ratio was 5.7% in FY2015 0 0.0% reflecting convergence of 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 （FY） construction work and decrease General Bonds Extraordinary expense for fiscal measures Special Bonds Dependence Ratio of special bonds and is expected
to be 6.3% in FY2016 ※Special Bonds： Bonds for cutting tax(including special exception), temporary tax revenue and third sector business ※The figure used for tax grants is the settled amount up to FY2015 and estimated amount in FY2016
29 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Public Bonds Redemption Fund (Bullet Bonds)
（Billion yen） In order to ensure future 250 redemption, the municipality in principle annually accumulates 201.5 201.3 an amount equaling 6% of the 200 184.2 187.0 187.7 186.3 182.1 total debt amount in its public bond redemption fund with no 161.3 144.0 145.7 146.1 shortage in accumulated amount 150 and no issue with redemption. Since FY2012 onwards, the drawdown amount has 100 exceeded the added amount, whereas from FY2007 to 54.5 52.8 52.1 50.8 47.2 47.3 50.6 47.1 53.4 49.6 48.0 FY2011 the trend was opposite. 50 This is due to a decrease in municipal bonds issuance, which also reduce the 0 outstanding amount. ▲ 31.9 ▲ 31.6 ▲ ▲ 50 36.1 ▲ 45.7 ▲ 50.2 ▲ ▲ ▲ ▲ 53.0 50.1 51.0 52.2 ▲ 65.1 ▲ 66.4
▲ 100 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 （FY）
Drawdown Added fund Balance
※General account figures ※The figure used for tax grants is the settled amount up to FY2015 and estimated amount in FY2016
30 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions
Ratio for Determining Financial Soundness/Financial Shortfall Ratio
While the restoration evaluation Ratio for Determining Financial Soundness Ratio for Determining Financial Nagoya City’s Ratio Early Fiscal Soundness ratio in FY2014 clears Category Overview rehabilitation reconstruction all criteria, the city will conduct FY2013 FY2014 FY2015 standard standard systematic fiscal management so Actual Ratio of actual deficit of general that no excessive burden is - - - 11.25％ 20％ deficit ratio account to standard fiscal scale handed down to the future Consolidated generations while giving Ratio of actual deficit of all actual - - - 16.25％ 30％ consideration to fairness in accounts to standard fiscal scale deficit ratio burdens among generations. Ratio of redemption money for principal and interest and FY2014’s capital shortage ratio of Actual debt expenditure equivalent to such 12.6％ 13.0％ 12.7％ 25％ 35％ expenditure ratio municipal companies reflects the money paid from general capital shortage in automobile account to standard fiscal scale transportation business. In the Ratio of actual debt to be borne by general account (e.g. high-speed railway business, Future burden Outstanding municipal bonds, 164.9％ 153.9％ 147.4％ 400％ although capital shortage emerged ratio planned expenditure based on according to Local Finance Act, no debt burden) to standard fiscal scale capital shortage ratio is recorded because the amount of capital Financial Shortfall Ratio shortage that can be eliminated exceeds the shortage. Nagoya City’s Ratio Standard for management Category Overview rehabilitation FY2013 FY2014 FY2015
City bus Ratio of fund shortage to operation business scale of public 14.9％ 11.0％ 6.1％ 20％ account enterprise ※FY2012 20.8％
31 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Comparison of Fiscal Condition with Other Cities
The city of Nagoya’s internal Comparison of FY2015 internal revenue ratios and municipal tax collection rates of various cities
revenue ratio is 65.9%, the （Internal revenue source ratio: %） （Municipal tax collection rate％） highest among the government- 75 99.27 98.87 designated cities. 70 99 65.9 98.27 Municipal tax collection rate is 65 64.8 97.94 97.80 97.57 97.61 97.72 98 also the highest among the 98.08 61.1 60.6 97.48 97.44 60 60.2 59.3 59.1 57.0 government designated cities. 96.67 55.6 54.9 54.4 96.69 97 55 96.20 96.89 52.5 52.3 96.68 50.1 z The ratio of independent revenue sources is.... 50 96.42 48.8 96 The ratio of revenue sources that a 47.1 46.6 95.42 95.97 46.2 44.8 municipality is able to raise independently 45 95.51 (such as city tax, fees and charges) to the 41.8 95 total revenue. Generally speaking, the higher 40 the ratio of independent revenue sources, the 35 94 more stable the fiscal structure is and the more solid the fiscal base is. Kobe Sakai Kyoto Chiba Osaka Niigata Sendai Nagoya Saitama Sapporo Fukuoka Shizuoka Kawasaki z Collection rate is … Okayama Hiroshima Yokohama Kumamoto Kitakyushu
an indicator of actual tax collection indicating Sagamihara Hamamatsu the ratio of actual tax revenue to municipal tax receivable Internal revenue source ratio Municipal tax collection rate Comparison of FY2016 financial capability indices (3-year average) among various cities The city’s financial capability index(3-year average) is the 1.1 0.999 0.987 0.979 second highest among the 1.0 0.969 0.953 0.932 0.925 0.916 government-designated cities 0.894 0.892 0.890 0.9 0.850 0.838 0.807 0.804 0.803 z Financial capability index is.,,, 0.8 0.743 The value obtained by dividing the standard 0.730 0.728 0.725 revenue by the standard expenditure that is 0.7 used to calculate the ordinary tax revenue allocated to a municipality. A value exceeding 0.6 1 in a single year would indicate the municipality’s financial capacity to conduct 0.5 standard fiscal management without depending on any ordinary tax allocated to the Kobe Sakai Kyoto municipality. The indicated value represents Chiba Osaka Niigata Sendai Nagoya Saitama Sapporo
the average of three years. Fukuoka Shizuoka Okayama Kawasaki Hiroshima Yokohama Kumamoto Kitakyushu Hamamatsu Sagamihara 32 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Nagoya City’s Position Among Municipal Bond Issuers
There are 55 issuing organizations Comparison of Municipal Tax Revenue of Issuing Organizations in FY 2014
of public subscription municipal （Billion yen） 4,735 bonds (nationwide) in Japan. Of 4,8001,600 those, 35 are prefectures and 20 4,6001,400 are ordinance-designated cities in 1,200 1,140 1,110 1,100 FY2016. 1,000 761 th 800 720 712 Among those, Nagoya ranks 12 in 659 631 th 581 552 municipal tax revenue and 18 in 600 504 487 352 324 population. Among ordinance 400 297 287 285 285 282 275 257 252 251 244 235 230 227 227 225 designated cities, Nagoya ranks 200 third after Yokohama and Osaka 0 City. Only 9 prefectures exceed Tokyo Mie pref. Gifu pref. Kobe city
Nagoya in terms of municipal tax Kyoto city Aichi pref. Osaka city Kyoto pref. Chiba pref. Osaka pref. Hyogo pref. Miyagi pref. Nagoya city Ibaraki pref. Ibaraki Niigata pref. Saitama city Tochigi pref. Gunma pref. Sapporo city Fukuoka city Nagano pref. Saitama pref. Kawasaki city Fukuoka pref. Shizuoka pref. Hokkaido pref.
revenue, and only 15 prefectures Yokohama city Hiroshima pref. Kanagawa pref. Fukushima pref. exceed Nagoya in terms of Comparison of Census Population of Issuing Organizations in FY 2015 (October 1) population. （Million people） In terms of municipal tax revenue, 16 13.51 9 organizations in the top 30 are 14 ordinance-designated cities while 6 12 10 9.13 8.84 organizations are ordinance- 7.48 7.26 8 6.22 5.54 designated cities in terms of 6 5.38 5.10 3.73 3.70 census population. Nagoya’s 4 2.92 2.84 2.69 2.61 2.33 2.31 2.30 2.10 2.03 1.97 1.97 1.95 1.92 1.91 1.82 1.79 1.65 1.54 1.54 financial capability and population 2 compare favorably with those of 0
prefectural governments. Tokyo Mie pref. Gifu pref. Kobe city Aichi pref. Osaka city Nagoa city Kyoto pref. Chiba pref. Miyagi pref. Osaka pref. Hyogo pref. Ibaraki pref. Ibaraki Niigata pref. Tochigi pref. Gunma pref. Sapporo city Fukuoka city Nagano pref. Saitama pref. Fukuoka pref. Shizuoka pref. Hokkaido pref. Okayama pref. Yokohama city Hiroshima pref. Kanagawa pref. Kumamoto pref. Fukushima pref. Kagoshima pref. 33 city of nagoya
【Appendix】
You can see this fusuma painting at Nagoya Castle Hommaru Palace 34 city of nagoya 【Appendix】 Table of Contents
IV. Appendix Management Status of Extra-governmental Organizations ・・・・・・Outlook for Future Fiscal Balance of General Account ・・・・36 for FY 2015 (Three Main Organizations) 43 Relations with Nagoya City Land Development Corporation・・44 Simulation of Changes in Outstanding Municipal Bonds (General Account) ・・・・・・37 Relations with Nagoya City Housing Supply Corporation ・・・・45
Settlement of Special Account for FY 2015 ・・・・・・38 Relations with Nagoya Expressway Public Corporation ・・・・・46
Settlement of Public Enterprise Account for FY 2015・・・・・・39 Financial Statements for FY 2015 (General Accounts) ・・・・・・47
Management Status of Public Enterprises in FY 2015・・・・・・40 Financial Statements for FY 2015 (All Accounts) ・・・・・・50
Municipal Transport Business Management Restoration FY2014 Consolidated Financial statements・・・・・・51
Plan (2015-2018) ・・・・・・41 Fiscal-related Data ・・・・・・53
Management Status of Extra-governmental Organizations ・・・42
36 city of nagoya IV. Appendix Outlook for Future Fiscal Balance of General Account
(Billion yen) FY2016 City of Nagoya formulates its Classification FY2017 FY2018 FY2019 FY2020 Budget budget through allocation of financial resources based on Municipal tax 506.5 506.1 507.3 512.9 509.7 revenue and expenditure forecast. Before tax decrease 518.1 517.5 518.9 524.7 521.2
Revenue and expenditure forecast 5% tax decreased -11.6 -11.4 -11.6 -11.8 -11.5
for the period from FY2017 to Revenue Municipal bond 68.1 69.8 78.4 80.1 77.4 FY2020 formulated for FY2017 Extraordinary financial budget indicates that while (20.0) (20.0) (20.0) (20.0) (20.0) measures bond municipal tax revenue is expected to remain flat, an increase in social Other 511.0 511.4 507.2 515.4 516.1 assistance expenditure etc. is Local tax grants (5.0) (5.0) (5.0) (5.0) (5.0) expected to Red a fiscal shortage 1,087.3 1,092.9 1,108.4 1,103.2 Total 1,085.6 in each fiscal year. 〈1,180.9〉 〈1,186.5〉 〈1,202.0〉 〈1,196.8〉
The fiscal shortage will be Labor cost 166.2 165.4 167.1 168.0 169.1 eliminated through continuous Social assistance 299.1 305.5 308.4 311.8 315.8 revision of administrative Expenditure expenditure operations and securing of Public bond cost 131.8 130.0 130.5 133.0 134.5 revenue by selling unutilized land properties, etc. Investment expenditure 96.0 100.8 103.8 112.7 107.2 Outstanding balance of municipal Other 392.5 392.7 393.9 396.6 395.5 1,094.4 1,103.7 1,122.1 1,122.1 bonds in general account is Total 1,085.6 expected to decrease every year. 〈1,188.0〉 〈1,197.3〉 〈1,215.7〉 〈1,215.7〉 Difference between revenue - -7.1 -10.8 -13.7 -18.9 and expenditure (Reference) Expected municipal bond 1,656.3 1,629.7 1,614.3 1,587.7 1,570.1 balance in general account ※ 〈〉written in total column include the expense of 93.6billion yen associated with delegation of power which incurs salaries of teaches who are paid by the prefecture. 36 city of nagoya IV. Appendix Simulation of Changes in Outstanding Municipal Bonds (General Account)
(Billion yen) 2,100 2,000 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 900 800 700 600 500 400 300 200 100 0
(FY)
Current outstanding municipal bonds In case of issurance of 70 bill. yen every year In case of issurance of 80 bill. yen every year In case of issurance of 90 bill. yen every year In case of issurance of 100 bill. yen every year
*General account numbers are indicated. The bar graph indicates simulated changes in current balance of outstanding municipal bonds based on FY2015 balance assuming no municipal bonds to be issued in and after FY2016. The line graph indicates simulated changes in current balance of outstanding municipal bonds taking issue amount from FY2016 into account.
37 city of nagoya IV. Appendix Settlement of Special Account for FY 2015
(Million yen) We have 11 special Account Revenue Expenditure Diffrence Description of operation accounts and 6 public Management of national health insurance National health insurance 252,260 252,418 -159 enterprise accounts, in operation addition to the general Medical care for people Provision of medical care for people aged 48,610 47,556 1,054 account. aged 75 and over 75 and over Management of nursing care insurance Nursing care insurance 168,358 167,132 1,226 A special account is operation established in accordance Loans to single mothers 1,117 992 125 Lending to single mothers and widows with city ordinance when it and widows is necessary to separate Management of Main market, Hokubu Market and accounting of revenue and 7,552 7,551 1 market, Nambu market and slaughterhouse expenditure from the slaughterhouses general account, such as a Loans to land Lending to private land readjustment 457 457 - special operation funded by readjustment associations associations special revenue. Urban area Implementation of urban area 1,524 1,524 - redevelopment redevelopment operation Graveyard and park Implementation of graveyard and park 577 577 - development development operation Management of 14 funds including Fund 116,074 116,074 - education fund Implementation of pre-acquisition of land Pre-acquisition of land 13,990 13,989 1 for public facilities Consolidated management of borrowing Public bond 517,845 517,809 36 and redemption of public bonds Total 1,128,364 1,126,079 2,285
※ Revenue shortfall of national health insurance in a special account is covered by a carry earmark of FY 2016. ※ Each amount is rounded off, so the total numbers may not agree with the sum of items shown. 38 city of nagoya IV. Appendix Settlement of Public Enterprise Account for FY 2015
The public enterprise account (Million yen) is a special account to which Account Revenue Expenditure Diffrence Description of operation the Local Public Enterprise Act Management of city hospitals and Hospital 32,218 31,857 361 is applied. improvement of related facilities Management of water service Water service 46,374 45,564 810 operation and improvement of related facilities Management of industrial water Industrial water 935 816 119 operation and improvement of related facilities Management of sewerage Sewerage 72,849 71,042 1,807 operation and improvement of related facilities Management of city bus operation Bus 24,104 21,984 2,120 and improvement of related facilities Management of subway operation Subway 91,474 80,123 11,351 and improvement of related facilities Total 267,955 251,386 16,569
※ Each amount is rounded off, so the total numbers may not agree with the sum of items shown.
39 city of nagoya IV. Appendix Management Status of Public Enterprises in FY 2015
(Million yen)
Category Hospital Water service Industrial water Sewerage Bus Subway Total assets 60,020 402,108 19,087 1,065,304 13,572 729,301 Assets Fixed assets 51,983 347,117 16,913 1,024,507 11,621 717,958 Current assets 8,037 54,992 2,175 40,797 1,952 11,343 Total liabilities 51,396 162,157 11,834 614,424 23,526 701,314 Noncurrent liabilities 40,929 115,429 6,874 446,989 16,019 514,282 Liabilities Current liabilities 8,358 30,500 225 46,750 6,844 73,620 Deferred income 2,108 16,228 4,735 120,685 663 113,412
Balance sheet Total equity 8,625 239,951 7,253 450,881 -9,954 27,988 Equity Capital 15,207 236,973 6,976 440,367 29,990 287,571 Surplus -6,583 2,978 277 10,513 -39,944 -259,583 Total liabilities and equity 60,020 402,108 19,087 1,065,304 13,572 729,301 Revenue 32,218 46,374 935 72,849 24,104 91,474 Expenses 31,857 45,564 816 71,042 21,984 80,123 Net income 361 810 119 1,807 2,120 11,351 The amount of change with the - 507 54 763 - - new accounting standards shift Retained earnings carried over -8,523 820 35 1,380 -42,416 -275,929 from previous year Unappropriated retained earnings
Profit and loss statement Profit -8,162 2,138 208 3,951 -40,296 -264,577
※ Each amount is rounded off, so the total numbers may not agree with the sum of items shown.
40 city of nagoya IV. Appendix Municipal Transport Business Management Restoration Plan (2015-2018) This plan aims to provide safe and high-quality transportation services for citizens and customers by putting an emphasize on “SAFETY” in addition to having a feeling of “CHALLENGE” as a transportation business manager. Plan Period 4 years from 2015 to 2018. Planned Goal ・Aim for 340 thousand passengers per day on FY 2018. ・Secure current account surplus. ・Dissolve fund shortage. ・Invest JPY 5bn during this plan. Muni Bus ・Aim for 1.27 million passengers per day on FY 2018. ・ Secure substantial current account ・Cut about 10% of substantial fund shortage (JPY 26.3bn) vs. FY 2014 surplus. ・Invest JPY 54.2bn during this plan Subway ( Substantial fund shortage of JPY-248.3bn) Revenue Plan Muni Bus Operation (Billion Yen) During the plan After the plan Category FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Passenger per day (1000 people) 332 335 337 340 341 341 342 342 343 343 Current account 0.8 1.2 1.0 0.8 0.5 0.4 0.5 0.5 0.5 0.6 Financial surplus or deficit -1.8 -1.4 -0.6 0.1 0.6 1.4 2.2 2.9 3.5 4.4 Fund shortage ratio（%） 9.26.83.1------
Subway Operation (Billion Yen) During the plan After the plan SAFETY ①Category FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Passenger per day (1000 people) 1,247 1,255 1,262 1,267 1,269 1,270 1,271 1,272 1,273 1,274 Substantial current account※1 3.5 3.8 4.5 5.2 5.8 6.5 7.9 8.0 8.3 8.8 Substantial fund shortage※2 -244.3 -239.7 -231.8 -222.0 -210.5 -195.8 -181.0 -165.8 -149.2 -136.5
※1 Substantial current account：Account which subtracts the amount of subsidy of special bond’s redemption from current account. ※2 Substantial fund shortage：Account which adds the balance of bonds of easing burden of capital charge and leveling capital charge to fund shortage. 41 city of nagoya IV. Appendix
Management Status of Extra-governmental Organizations
(Million yen) Financial Situation Loss Municipal Loan by compensatio Category Capital Ordinary Current investment Total assets Total debts New assets Nagoya n and loan profit/loss *1 profit/loss *2 guarantee Nagoya City Land Development Corporation 20 20 39,970 38,384 1,586 213 213 6,905 29,450 Nagoya Meat Market Co., Ltd. 480 236 2,183 3,643 - 1,460 241 212 2,747 (Public utility foundation) Nagoya City Smaller Business Mutual 120 120 27,362 27,203 159 - 3 - 3 International Design Center NAGOYA,. IdcN 12,147 4,005 7,247 583 6,664 - 2 18 (Public utility foundation) Nagoya Meat Corporation 105 90 215 107 107 6 6 100 (Public utility foundation) Nagoya Industries Promotion 215 120 2,652 1,751 901 106 93 1,004 270 (Public utility foundation) Nagoya International Center 345 321 1,612 215 1,397 28 28 (Public utility foundation) Nagoya Citizens Recreation Village 10 10 236 213 23 5 5 (Public utility foundation) Nagoya Philharmonic Orchestra 10 10 562 266 296 78 78 (Public utility foundation) Nagoya City Cultural Promotion Agency 60 30 1,935 854 1,081 107 107 (Public utility foundation) Nagoya Convention & Visitors Bureau 1,055 500 1,478 47 1,431 6 6 (Social welfare corporation) Nagoya City Rehabilitation Agency 30 30 1,569 990 580 215 214 Nagoya Showa Tatemono Service Co., Ltd. 50 16 80 40 40 7 7 (Public utility foundation) Nagoya Urban Development Pubic 1,010 1,010 19,531 10,282 9,249 801 769 2,265 2,934 Nagoya City Housing Supply Corporation 50 50 26,309 23,459 2,850 51 79 16,209 948 Nagoya Expressway Public Corporation 317,588 158,794 1,682,045 1,364,637 317,408 - - 72,173 312,673 Wakamiya Park 1,063 602 3,185 2,322 862 15 8 Nagoya Guideway-Bus Co., Ltd. 3,000 1,900 1,227 1,979 - 753 9 8 1,787 Sakae Park Promotion Co., Ltd. 1,500 788 2,423 626 1,798 11 6 Nagoya Rinkai Express Railway Co., Ltd. 100 77 4,930 1,419 3,510 121 108 (Public utility foundation) Nagoya Construction Services Foundation 30 30 530 53 478 25 18 MEISEI SOIL RECYCLING SYSTEM Co., Ltd. 200 82 1,304 54 1,251 131 91 (Public utility foundation) Nagoya-city Education and Sports Association 120 60 3,312 2,066 1,246 32 32 Nagoya Water and Sewage General Service Co., Ltd. 630 600 1,730 579 1,151 49 29 (Public utility foundation) Nagoya Construction Services 100 100 12,738 9,597 3,141 458 269 *Capital and municipal investment figures are as of July 1, 2016. Other figures are as of FY2015. *Values are rounded off to the indicated numbers and may not match in total. *1: Numbers for public utility foundations, companies and three local public corporations, and social welfare corporations are respectively changes in current ordinary revenue/expenditure, ordinary profit (loss) and current revenue/expenditure. *2: Numbers for public utility foundations, companies and three local public corporations, and social welfare corporations are respectively, changes in current general net assets, current profit (loss) and current activities revenue/expenditure difference. 42 city of nagoya IV. Appendix Management Status of Extra-governmental Organizations for FY 2015 (Three Main Organizations)
(Million yen) Nagoya City Land Nagoya City Housing Nagoya Expressway Category Development Corporation Supply Corporation Public Corporation
Investment 20 50 317,408 Statement Of those, investment by Nagoya 20 50 158,704 of investment (Investment ratio) 100% 100% 50% Number of investors 112 Total assets 39,970 26,309 1,682,045 Fixed assets 22 19,045 1,673,386 Assets Current assets 39,948 7,264 7,665 Deferred account - - 994 Balance Total liabilities 38,384 23,459 1,364,637 sheet Liabilities Noncurrent liabilities 27,224 12,339 1,274,587 Current liabilities 11,160 11,120 90,051 Net worth 1,586 2,850 317,408 Total liabilities and net worth 39,970 26,309 1,682,045 Revenue 4,376 11,360 72,562 Profit and loss Expenditure 4,163 11,281 72,562 statement Net income (after tax) 213 79 -
※ Each amount is rounded off, so the total numbers may not agree with the sum of items shown.
43 city of nagoya IV. Appendix
Relations with Nagoya City Land Development Corporation
Purpose Nagoya City Land Development Corporation conducts its activities including acquisition, management and disposal of lands for public use based on Act on Advancement of Expansion of Public Lands. Basically it stopped acquiring lands from FY2014. City of Nagoya provides the corporation with financial supports including debt guarantee for loans from private-sector, loans and interest subsidy. City of Nagoya will make a repurchase plan of corporation’s land and try to dissolve the possession of corporation’s land by FY 2023.
Nagoya City Land City of Nagoya Development Redeemed: Repurchase: 15.05 bill. yen Financial 6,920 mill. yen Corporation Borrowed: institutions 8.15 bill. yen Outstanding loan Interest payment: 290 mill. yen Interest subsidy 29.45 bill. yen Administrativecost payment: 320 mill. yen Outstanding loans Value of lands held Repurchase: Ministry of -yen 6.91 bill. yen 38.92 bill. yen Land, Infrastructure, Maximum debt Transport and Tourism guarantee amount for loans New acquisition: -yen 31 bill. yen Land owners
Value of land held and outstanding loan amount are actual numbers as of the end of FY2015. Other numbers are planned numbers for FY2016 budget of Nagoya City Land Development Corporation. 44 city of nagoya IV. Appendix
Relations with Nagoya City Housing Supply Corporation
Purpose Nagoya City Housing Supply Corporation conducts its activities including supply of housing for sale and rent and management of municipal housing on behalf of the city of Nagoya based on Local Housing Corporation Act and Act on Public Housing. The city of Nagoya provides the Corporation with financial supports including loans and compensation for losses.
Nagoya City Housing Financial City of Nagoya Supply Corporation institutions
Loans: Properties for sale 2.50 bill. yen 650 mill. yen Redemption: Redemption: 360 mill. yen 2.58 bill. yen Properties for rent Outstanding loans Outstanding loans 17.92 bill. yen Interest payment: 16.21 bill. yen 20 mill. yen 1.95 bill. yen Municipal housing management fee: 11.66 bill. yen Municipal housing managed Maximum amount of 62,945 units compensation for losses from loans 3.45 bill. yen
Asset balance, outstanding loan amount and the number of municipal housing units managed are actual numbers as of the end of FY2015. Other numbers are planned numbers for FY2016 budget of Nagoya City Housing Supply Corporation. 45 city of nagoya IV. Appendix
Relations with Nagoya Expressway Public Corporation
Purpose Nagoya Expressway Public Corporation conducts activities including new construction, reconstruction, maintenance, repair and other management and related operations based on Local Road Public Corporation Act. The city of Nagoya provides the Corporation with financial supports including guarantee for loans, investment and loans.
Nagoya Expressway City of Nagoya Financial institutions Public Corporation Public corporation bond etc.: Redemption: 66.83 bill. yen 9.53 bill. yen Outstanding loans Redemption: 49.4 bill. yen Interest payment: 43.82 bill. yen Outstanding loans 1.14 bill. yen Interest payment: Outstanding public 72.2 bill. yen 7.38 bill. yen corporation bond Investment: Road assets 90 mill. yen 1,672.9 bill. yen 413.0 bill. yen Loan 210 mill yen Loan: Ministry of Land, Investment balance 300 mill yen Infrastructure, 158.7 bill. yen Transport and Tourism Maximum amount of Redemption: compensation for losses 20.15 bill. yen Outstanding loans from loans 161.9 bill. yen 352.7 bill. yen
Guaranteed 50/50 by Fee revenue: prefecture and city 63.15 bill. yen Expressway users
Asset balance and loan balance are actual values as of the end of FY2015. Other values are planned value for FY2016 budget of Nagoya Expressway Public Corporation. Fully opened on November 23, 2013 (81.2km). The loan is scheduled to be repaid by December 2045. 46 city of nagoya IV. Appendix
Financial Statements for FY 2015(General Accounts）(1)
Balance Sheet (General Account) (As of March 31, 2016) (Billion yen)
Debit Credit ※1 Assets created by subsidy to other bodies and private sector [Assets] [Liabilities] 255.2 billion Sources of revenue allocated to the above subsidy Public property 3,450.4 Noncurrent liabilities 1,629.0 ① Subsidy from government and prefecture, etc. 64.7 billion Tangible fixed assets 3,408.4 Municipal bonds 1,469.4 ② Municipal bonds 65.6 billion ③ General revenue, etc. 124.9 billion Available-for-sale assets 42.0 Long-term accrued liabilities 7.2 ※2 Information on debt burden activities Reserve for retirement Investments 763.0 118.5 ① Purchase of property, etc. 142.6 billion benefits ② Guarantee of liabilities or compensation for loss Investments and capital Reserve for compensation 1,668.7 billion 582.4 33.9 investments for loss 〔Of those, for jointly-issued bonds 1,308.5 billion 〕 ③ Other 46.5 billion Loans 142.9 Current liabilities 279.2 ※3 Of outstanding municipal bonds (including the amount of the Current portion of municipal Funds 24.9 257.2 current portion of municipal bonds), 685.2 billion yen is bonds expected to be included in the basis for calculation of local tax Long-term bad loans 13.5 Short-term borrowing - grants at the redemption. ※4 Information on future burden of general account Unrecoverable loans -0.7 Accrued liabilities 0.3 Future burden of general account 2,462.2 billion (estimate) Future burden reduction assets including funds 1,751.7 billion Current portion of retirement Current assets 221.7 13.1 (Net) Actual debt in the future 710.5 billion benefits ※5 Of tangible fixed assets, land amounts to 2,590.1 billion yen. Cash and deposits 219.5 Reserve for bonuses 8.6 In addition, accumulated depreciation and amortization of tangible fixed assets amount to 1,821.3 billion yen. Financial adjustment fund 10.9 Total liabilities 1,908.2 Sinking fund 197.0 ［Net worth］ Subsidy from government and Annual cash 11.6 prefecture for development of 621.4 public property, etc. The financial statements indicate the status General revenue for of asset, worth and funding sources as of Accounts receivable 2.2 development of public property, 2,406.4 fiscal year end. etc. Other general revenue, etc. -499.4 Valuation difference on assets -1.5 Total net worth 2,526.9 Total assets 4,435.1 Total liabilities and net worth 4,435.1
※Made by the revised model of the Ministry of Internal Affairs and Communications (MIC). 47 city of nagoya IV. Appendix
Financial Statements for FY 2015 (General Accounts) (2)
Statement of Administrative Costs (General Account) Net worth matrix (General Account) (From April 1, 2015 to March 31, 2016) (From April 1, 2015 to March 31, 2016)
Ordinary administrative costs (Billion yen) Total Composition Cost per citizen Beginning balance of net worth 2,517.3 Category (Billion yen) ratio (%) (1000 yen) Net ordinary administrative costs -776.0 Personnel 159.8 19.3 70.5 General revenue 571.8 Personnel expenses 142.8 17.3 63.0 Municipal tax 505.5 Provision for reserve for retirement benefits 8.4 1.0 3.7 Local tax grants 7.6 Provision for reserve for bonuses 8.6 1.0 3.8 Other revenue used to cover 58.7 Property 168.1 20.3 74.2 administrative costs Property costs 87.2 10.5 38.5 Receipt of subsidy 209.1 Maintenance and repair costs 23.4 2.8 10.3 Temporary income and loss 5.6 Depreciation expenses 57.5 7.0 25.4 Disaster recovery operation cost - Transfer payment 474.2 57.3 209.3 Gain/loss from disposal/sale of Social security benefits 276.6 33.4 122.0 2.8 Subsidy 31.9 3.9 14.1 public property Payment to other accounts 149.9 18.1 66.2 Loss on investment 0.1 Subsidy for development of public property, Provision of reserve for 15.8 1.9 7.0 2.7 etc. to other organizations compensation for loss Other 25.7 3.1 11.3 Change due to asset reevaluation -0.9 Interest expenses 24.6 3.0 10.8 Other - Unrecoverable loans (estimate) 1.1 0.1 0.5 Ending balance of net worth 2,526.9 Other administrative costs - - - ※Using the revised model of the Ministry of Internal Affairs and Total ordinary administrative costs a 827.8 100.0 365.3 Communications (MIC). ※ Cost per citizen is based on the population registered in the basic resident register as of the end of FY 2015 The statement of administrative costs is to be (2,266,161). used for understanding, from a cost perspective, Ordinary revenue activities providing administrative services that do Category Total (Billion yen) not lead to asset building, such as personnel Usage fee and service charge b 43.5 services and benefits providing services. Contribution, burden charge, donation c 8.3 Net worth matrix indicates changes in the net Total ordinary revenue d＝(b＋c) 51.8 worth section of the balance sheet from the d / a 6.3% beginning to the end of a year. (Difference) Net ordinary administrative costs a－d 776.0
48 city of nagoya IV. Appendix
Financial Statements for FY 2015 (General Accounts) (3)
Statement of Cash Flow (General Account) (From April 1, 2015 to March 31, 2016) (Billion yen) 1 Cash flow from ordinary activities 3 Cash flow from investing and financing activities Personnel expenses 160.5 Investments and capital investments 1.3 Property costs 87.2 Loans 80.9 Social security benefits 276.6 Provisions for fund 7.1 Subsidy 31.9 Payment provided to fixed-amount funds - Interest expenses 24.6 Payment provided for debt expenditure of other 38.5 Payment provided for administrative fees of 109.9 accounts other accounts Redemption of municipal bonds 118.9 Other expenditure 23.5 Payment of long-term accrued liabilities - Total expenditure 714.2 Total expenditure 246.7 Municipal tax 505.6 Subsidy from government and prefecture 0.2 Local tax grants 7.6 Loans recovered 92.7 Subsidy from government and prefecture 192.1 Reversal of fund 4.5 Usage fees and service charges 35.7 Issuance of municipal bonds 1.5 Contributions, burden charges, donations 8.1 Revenue from sale of public property 4.4 Miscellaneous revenue 25.9 Other revenue 2.9 Issuance of municipal bonds 24.8 Total revenue 106.2 Reversal of fund 1.2 Cash flow from investing and financing activities -140.5 Other revenue 88.3 Changes in cash 4.2 Total revenue 889.3 Cash flow from ordinary activities 175.1 Cash, at the beginning of fiscal year 7.4 Cash, at the end of fiscal year 11.6 2 Cash flow for development of public property Payment for developing public property 64.2 ※Using the revised model of the Ministry of Internal Affairs and Communications (MIC). Payment of subsidy for developing public 18.6 ※1 Temporary borrowing property ①Changes in temporary borrowing are not included in the statement of cash flow. Payment provided for construction costs of other 4.1 ②Limitation on temporary borrowing for the current fiscal year is 160 billion yen. accounts ③Of interest expenses, interest on temporary borrowing is 2 million yen. Total expenditure 86.9 ※2 Information on primary balance Subsidy from government and prefecture 16.8 Gross revenue (excluding surplus carried forward) 1,058.5 billion yen Issuance of municipal bonds 35.9 Surplus carried forward -6.5 billion yen Reversal of fund 1.7 Issuance of municipal bonds -62.2 billion yen Other revenue 2.1 Reversal of public finance adjustment reserve funds -4.5 billion yen Total revenue 56.5 Gross expenditure -1,046.9 billion yen Cash flow for development of public property -30.4 Redemption of municipal bonds 143.5 billion yen The statement of cash flow clarifies annual cash flow, which Provisions for public finance adjustment reserve funds 2.2 billion yen Primary balance activities require funding, and how they are financed. 84.1 billion yen
49 city of nagoya IV. Appendix Financial Statements for FY 2015 (All Accounts)
Balance Sheet (All Accounts) (As of March 31, 2016) (Billion yen) Debit Credit ［Assets］［Liabilities］ Public property 5,645.2 Noncurrent liabilities 3,039.2 Tangible fixed assets 5,525.4 Municipal bonds 2,544.2 Intangible fixed assets 77.8 Municipal bonds of general account 1,469.4 Available-for-sale assets 42.0 Municipal bonds of public enterprises 1,074.8 Investments 433.6 Long-term accrued liabilities 8.0 Investments and capital investments 248.4 Reserve 201.4 Loans 143.8 (Reserve for retirement benefits) 164.9 Funds 29.6 (Other reserve) 36.5 Long-term bad loans 12.8 Other 285.6 Other 0.6 Current liabilities 447.8 Unrecoverable loans (estimate) -1.6 Current portion of municipal bonds 347.8 Current assets 341.4 Short-term borrowing 0.2 Cash 297.9 Accrued liabilities 46.6 Accounts receivable 33.3 Current portion of retirement benefits 15.7 Other 11.4 Reserve for bonuses 13.1 Unrecoverable loans (estimate) -1.2 Other 24.4 Deferred account 2.4 Total liabilities 3,487.0 ［Net worth］ Total net worth 2,935.6 Total assets 6,422.6 Total liabilities and net worth 6,422.6
※1 Information on debt burden activities ① Purchase of property, etc. 142.6 billion yen ② Guarantee of liabilities or compensation for loss 1,671.5 billion yen Of those, for jointly-issued bonds 1,308.5 billion yen ③ Other 46.5 billion yen ※2 Of outstanding municipal bonds of general account and municipal bonds of public enterprises (including the amount of the current portion of municipal bonds), 949.5 billion yen is expected to be included in the basis for calculation of local tax grants at the redemption. ※3 Of tangible fixed assets, land amounts to 2,702.2 billion. In addition, accumulated depreciation and amortization of tangible fixed assets amount to 3,624.2 billion yen. 50 city of nagoya IV. Appendix FY2014 Consolidated Financial Statements
The financial statements are also prepared on a “consolidated” basis, adding affiliated organizations’ accounts to the city’s accounts. The scope of the consolidation is as follows:
Consolidation
All accounts Special district authorities (3)
Cross-regional federation (1)
General account Public university corporation (1)
＋ Local public corporations (3) ＋ Special account The 3rd Sector etc. (23) Corporations where the city government ＋ play leading roles in their management- including corporations and the city’s affiliated organizations of which over Public enterprise account 50% of capital is paid by the city and which directors are dispatched to and financial assistance is provided.
51 city of nagoya IV. Appendix
Balance Sheet (Consolidated) (As of March 31, 2015)
(Billion yen) Debit Credit ［Assets］［Liabilities］ Public property 7,626.4 Noncurrent liabilities 3,896.1 Tangible fixed assets 7,498.3 Municipal bonds 2,655.1 Long-term debt from concerned Intangible fixed assets 82.7 707.2 bodies Available-for-sale assets 45.4 Long-term accrued liabilities 12.2 Investments 168.6 Reserve 183.5 Investments and capital investments 35.2 (Reserve for retirement benefits) 173.7 Loans 52.5 (Other reserve) 9.8 Funds 65.4 Other 338.1 Long-term bad loans 15.3 Current liabilities 570.8 Other 3.0 Current portion of municipal bonds 441.6 Unrecoverable loans (estimate) -2.8 Short-term borrowing 8.4 Current assets 438.5 Accrued liabilities 57.0 Cash 336.3 Current portion of retirement benefits 16.6 Accounts receivable 49.4 Reserve for bonuses 13.8 Property for sale 41.9 Other 33.4 Other 12.0 Total liabilities 4,466.9 Unrecoverable loans (estimate) -1.1 ［Net worth］ Deferred account 4.3 Total net worth 3,770.9 Total assets 8,237.8 Total liabilities and net worth 8,237.8 ※Using the revised model of the Ministry of Internal Affairs and Communications (MIC).
※1 Information on debt burden activities ① Purchase of property, etc. 98.0 billion ② Guarantee of liabilities or loss compensation 2,977.2 billion Of those, for jointly-issued bonds 2,593.2 billion ③ Other 98.6 billion ※2 Of outstanding municipal bonds of general account and municipal bonds of public enterprises (including the amount of the current portion of municipal bonds), 983.7 billion yen is expected to be included in the basis for calculation of local tax grants at the redemption. ※3 Of tangible fixed assets, land amounts to 2,807.3 billion. In addition, accumulated depreciation and amortization of tangible fixed assets amount to 3,736.2 billion yen.
52 city of nagoya IV. Appendix Fiscal-related Data
Category 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Population 2,223,148 2,236,561 2,247,752 2,257,888 2,263,894 2,266,517 2,266,851 2,271,380 2,276,590 2,296,014 Nominal municipal gross 13,187.9 13,250.7 12,555.7 11,628.4 11,579.1 11,785.4 11,847.1 12,319.3 - - production Municipal tax revenue 495.2 516.5 516.3 493.8 476.2 486.1 487.3 488.2 503.5 505.6
Internal revenue ratio (%) 69.0 71.2 70.0 66.2 65.1 66.5 67.1 67.2 65.9 65.9
Financial capability index 0.994 1.022 1.048 1.064 1.041 1.013 0.985 0.983 0.984 0.985
Real public bond ratio (%) 20.9 14.1 13.5 12.7 12.1 12.0 12.1 12.6 13.0 12.7
Future burden ratio (%) - 230.4 224.9 218.6 216.3 202.5 188.4 164.9 153.9 147.4 Outstanding municipal bond 1,839.6 1,814.8 1,801.8 1,814.4 1,847.8 1,849.7 1,823.8 1,774.2 1,746.3 1,695.7 balance (general account) Outstanding municipal bond 3,369.2 3,323.1 3,282.1 3,263.9 3,283.6 3,244.3 3,174.8 3,079.2 3,003.6 2,897.7 balance (all accounts) Municipal bond issue amount 83.8 82.2 97.3 109.3 124.0 93.0 83.6 75.9 81.7 60.3 (general account/new issue) Municipal bond issue amount 177.8 201.0 192.6 190.6 230.7 161.3 135.7 129.9 139.0 107.0 (all accounts/new issue) Municipal bond issue amount (total amount including 298.6 296.4 289.8 274.0 287.9 227.4 235.0 240.8 263.3 206.6 refinancing bonds) Ordinary revenue/expenditure 94.7 97.2 96.8 98.1 99.4 99.8 99.8 100.2 99.3 97.5 ratio (%) Units for items without specification are in billion except the financial capability index. Population values are as of October 1 of each year. For municipal tax revenue and outstanding municipal bond balance, please refer respectively to p. 23 and p. 27 of the main document.
53 Reminder
This material explaining the fiscal condition of the City of Nagoya is intended for investors considering purchasing Nagoya City municipal bonds. It is not related to the sale or offer of any particular bond.
The contents of this material are as of October 2015, based on the settlement of accounts for FY 2014, and are subject to change in the event of future developments in the local fiscal system and/or economic conditions.
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